Deputy Prime Minister Ali Babacan’s Speech at the G20 Sherpa Meeting

Welcome to Istanbul, welcome to Turkey. It’s our great pleasure to have you all here in this splendid city. This will be the very first Sherpa meeting that is going to be taking place under Turkish Presidency. I hope this meeting becomes a productive one and I also hope that you have some time to see the beauties of Istanbul as well.

I’m very happy that our Sherpa, Ambassador Ayşe Sinirlioğlu, has come to Turkey recently from her posts as Ambassador in different countries and she is going to be coordinating the Sherpa track on our behalf all throughout this process. She is fully charged to make this process a successful one. So, we wish both Ambassador Sinirlioğlu and each of you success during this heavy working period.

Maybe just a few words about our Presidency and what we are up to. First of all, looking back, I view 2014 as a fruitful year for G20, thanks to our Australian colleagues. And now it is our time to maintain this success.  We will strive to build on the good work by our predecessors and lay the foundations for further progress for our successor, China.

I hope that throughout our Presidency, the G20 will continue to be focused, relevant and able to achieve positive outcomes in the areas of interest and we will have a successful summit eventually in November in Antalya.

The success of our performance will depend on our collaboration and your firm contributions. In order to address existing risks and uncertainties, we should preserve our spirit of cooperation, determination and coordinated action that we demonstrated in the aftermath of the global crisis. It is of critical importance to support our commitments with concrete policy actions. This is clearly in the interest of the G20 members, but this is also not an easy endeavor.

We have recently announced our priorities. Three Is will guide us in our endeavors as the G-20 Chair during the entire year. And what are these three Is? Inclusiveness, Implementation and Investment for growth. Though all aspects of these priorities are important to us, there are specific subjects that we give special importance under each of these Is. As you will hear in more detail about the overview of 2015 agenda, without going into too much detail, I’d like to go over just a few of these subjects.

A peculiar aspect of our Presidency, which is one of the three Is, will be Inclusiveness, with both its domestic and global dimensions.

SMEs (Small and Medium Sized Enterprises) and Low Income Developing Country perspectives will be two cross-cutting subjects to be introduced across the work streams of the G20. So under every agenda item -we have a total of 11 agenda items, combined Sherpa and Finance tracks- we would like to ask questions about SMEs. What are we doing for SMEs? We believe that in both developing countries and developed countries, SMEs play a critical role in boosting employment, competitiveness and as a result of these, of course, growth. They are also crucial to sustain the innovative edge of our economies. We will work on the ways to help SMEs for a more robust growth, such as their inherit riskiness, their difficulty in accessing long term finance and participation to global value chains. As a potential contribution to our envisaged efforts, we have asked the International Chamber of Commerce to launch a World SME Forum. They already have a quite extensive network globally which will help this forum to be started pretty fast. This forum will act as a conduit to voice the expectations and concerns of the SMEs to the B20 and also to the governments of the G20.

For a healthy and balanced global economy, we need also to take into consideration the global aspects of inclusiveness. And Low Income Developing Countries in this respect is going to be a subject which we would like to look into under every agenda item. The issues related to LIDCs will be raised in a way more locally. We believe that Low Income Developing Countries have huge untapped potential. Taking their problems and issues into consideration within our G20 agenda more thoroughly will in a way help more balanced global growth.

Inclusiveness is also a relevant matter for economic and social participation for women and youth as they reflect its domestic aspect. Our leaders committed to reducing the gender participation gap and youth unemployment. To deliver on this commitment; boosting youth employment and raising female participation will be high priorities for us. But, our focus on employment will not be limited to this issue. We will also focus on the income inequality, especially the decreasing share of labor income. We will also work on the ways to enhance the productivity of labor and work with international organizations to understand the factors behind the jobless growth phenomenon observed since the global financial crisis.

When we look at the second I, Implementation, which is another critical aspect of our priorities; among other things, we are going to be giving special importance to implementation of our growth strategies. The G20 members have committed to more than one thousand reforms to ensure that collective growth objective is met. It is now imperative to implement what has been committed and we are hoping to have a monitoring mechanism about how the performance in terms of implementation is going on vis-à-vis these commitments.

Also, we have worked on many other frameworks and action plans like Base Erosion and Profit Shifting Project, Global Infrastructure Initiative, National Employment Plans and 2015-2016 Anti-Corruption Action Plan.

The third I, Investment, will also be a central theme, as it is critical both to boost potential and also to stimulate demand.

It is important to support our “2 in 5” target. In most of the advance and emerging market countries, there is a substantial need for investments, especially in infrastructure. We would like to introduce a new narrative to address investment gaps of G20 countries via concrete and ambitious investment strategies.

We are aware that closing these investment gaps requires considerable amount of financing. In this regard, for those countries with fiscal space, it could be possible to mobilize public resources to boost infrastructure investments. But it should not, of course, jeopardize their medium term fiscal frameworks. For the others, we should find ways to mobilize private sources to finance infrastructure investments. PPP’s, public-private partnerships in this regard is a specific area which we believe could be spent more time. We have already actually asked the World Bank to make a study about how to standardize these projects and how to make them easier to securitize when necessary. Affordability, feasibility and risk sharing are the aspects to look into in this area.

Trade is another important item. It is a great social concern that in recent period, the growth of global trade fell below its 20 year average before the crisis. We all know that an open trading system is crucial for the pace and sustainability of global economic growth and an important channel for generating positive spillovers across economies. We believe that G20 countries, accounting for the three quarters of the world trade, have potential to boost global trade growth to pre-crisis levels. In this respect, continuing to follow-up our commitment to resist protectionism and supporting the multilateral trading system will be important priorities for our Presidency. WTO has an important role to play in ensuring an open, predictable, non-discriminatory and rule-based multilateral trading system. In 2015, we will support work to canvass the vast number of bilateral, regional and plurilateral agreements to have a better understanding of whether, as intended, they complement one another and act as building blocks to multilateral agreements.

We attached great importance to your views on the agenda, work plan and other relevant issues. Your feedbacks will be very crucial in achieving our objectives for this year. Please be assured that the communication channels will be wide open throughout Turkish Presidency.

One subject which I also want to talk about is the additional areas of work for the G20 vis-à-vis especially the business, the labor unions, think-tanks and so forth. So we have a B20 structure, of which actually we are going to launch very first meeting today here in Istanbul. We have received closely 600 business people from 37 countries to Istanbul and I understand that you are invited to a reception tonight to meet the B20 groups. But also L-20 is of course very very important. It is very important to work with them to get their very valuable input for employment generation. And we already have a T20 structure in place. Recently we have received an offer to have also a W20, meaning Woman 20 structure. The idea is how to increase the role of women in business, how to make women more effective in business. It’s very important for us to hear your views. We don’t have yet a concrete document or any concept paper or something like that. So this is something still being considered and I think it will be valuable for you to have a discussion about this, maybe a short discussion. There are just some ideas floating, but we would very much like to have your views about if we should do it or how to do it. As the government, we are willing to do it but it will be possible only if there is a strong support throughout the G20 platform.

So just to close, what I have already said, I sincerely hope that this meeting, this very first meeting of Sherpas’ here in Istanbul will lay the foundations for our year-long marathon and make a meaningful difference to global prospects. We are very much looking forward to working with all of you, all throughout the year of 2015. Thank you for being here and thank you for your very valuable views and contributions to all the G20 work that is waiting for us.    Thank you.